I’m the Washington D.C. bureau chief for Forbes and have worked in the bureau for more than two decades. I've spent much of that time reporting about taxes -- tax policy, tax planning, tax shelters and tax evasion. These days, I also edit the personal finance coverage in Forbes magazine and coordinate outside tax, retirement and personal finance contributors to Forbes.com. You can email me at jnovack@forbes.com and follow me on Twitter @janetnovack.

Should College Students Be Forced To Buy E-Books?

It’s not just rising college tuition and room and board charges. It’s all those incidentals–from student activity and health fees to lab fees and books–that are turning higher education into such a financial burden. According to the College Board’s latest Trends In College Pricing report, in 2011-2012, books and supplies cost students at four year public colleges an average of $1,168, and at private non-profit four-year colleges an average of $1,213. Nor is this a new problem. A 2005 report by Congress’ Government Accountability Office found that from 1986 through 2004, text book prices nearly tripled, rising at twice the rate of inflation.

So I was intrigued when a representative of McGraw-Hill e-mailed that Tom Malek, an executive from the company’s higher ed division, wanted to write a guest post about a plan to bring down those costs with e-books.

Full disclosure: As the parent of two college students, I’m not convinced by the solution Malek offers, which would force students to buy new e-books, rather than allowing them to buy used (or new) paper texts. Neither is my daughter, who conscientiously scouts for deals (and even gets free hand-me-downs) before buying pricey science text books. While she would be lost without her iPhone and MacBook, she prefers to do her heavy duty reading and studying on dead trees—as I know I do. Still, students and parents alike should pay attention to what Malek has to say, since his model may be tried out soon at a university near and dear to your pocketbook.

Solving the E-book Problem in Higher Education

By Tom Malek, Vice President of Learning Solutions for McGraw-Hill Higher Education

For some time now, e-books have been the presumed future of higher education. The reasons why have always been pretty apparent: they have the potential to save students money, they’re a lot easier to carry around, and because today’s students seem to prefer digital to print when it comes to just about everything else, it followed that they’d feel the same way about textbooks.

At first it was the growing popularity of traditional e-readers – your Kindles, your Nooks – that was supposed to drive this trend. Then along came the iPad, which was adopted in astronomically large numbers by consumers and students alike and offered the promise of a new kind of interactive reading experience. Last month saw one of the biggest bets yet on e-books, when Microsoft announced that it will invest $300 million in a joint venture with Barnes & Noble that includes not only the bookseller’s Nook e-reader and digital division, but also it college bookstores. Barnes & Noble valued the venture at $1.7 billion, which is striking when you consider that Barnes & Noble’s own market cap was less than $900 million at the time of the announcement.

But a funny thing happened on the way to the e-book revolution: students decided to stay with print. E-book adoption among college students has remained consistently, almost puzzlingly low. Studies currently show that about 3 percent of college students are purchasing e-books. If today’s students are truly digital natives, and if e-books offer so much value to students, why haven’t we seen more uptake?

For one, when it comes to studying, students have shown a strong preference for the familiar, and are often reluctant to give up print – something they’ve been accustomed to their entire lives. It’s also a problem of perception. Students who are unaware of how e-books can enhance the learning experience are less likely to adopt, even if it means spending a few extra dollars.

This is where price becomes important. Companies, including my own, simply have not been able to deliver e-books at a price that’s low enough to entice college students to make the switch from print to digital. There are a number of factors affecting the price of e-books, but the long and the short of why they’re not priced lower is that the costs that are saved by shifting from print to digital – things like paper, printing and warehousing – represent only a fraction of what it costs to produce a book. The highest costs – research, paying our authors – don’t change no matter what form the final book takes. To date, e-books have offered students some cost savings; those savings just haven’t been enough to get them to put down their more familiar print textbook and switch over to digital. When you consider all the ways that e-books can help students learn more effectively, this becomes a much larger problem.

Recently, however, publishers have begun developing innovative new models that allow them to provide e-books to students more affordably. In one example, McGraw-Hill has partnered with several colleges and their bookstores to ensure that all students have access to the learning materials for their courses at a price that’s substantially lower than what they’re used to paying – as much as 60% less than a print textbook. This is highly competitive with the price of a used book and provides students with the many other benefits of e-books: portability, instantaneous access to course material on the first day of class, and assurance that they’re using the right edition. It also represents a significant savings for students: The College Board has reported that college students, on average, spend about $1,000 a year on textbooks. Some studies have shown that up to one-third of students (or more) opt to not purchase a textbook for a course they’re taking for the purpose of saving money, which clearly can have an adverse effect on a student’s academic performance.

Through these new models, we’re finally getting e-books into the hands of a large number of students – and helping them save money in the process. Here’s a look at a few keys to how these models work.

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I was disappointed to see that there have not been any comments. They are usually very interesting and I learn quite a bit from them.

As for the topic itself, I find myself firmly opposed to forcing anyone to buy anything, especially in this case. Students themselves, as individuals (that is, they should not decide for other students), should be allowed to decide what they want to do, and succeed or fail based on their own merits.

I do not take it as fact that these books are necessary, as professors should know their material well enough to cover the important points and answer questions that are posed. I find attempts to make these books necessary to be insidious and to be contrary to the best interests of the students. I was not pleased to find that I had to purchase a book because the professor decided to assign and grade selected problems (Is it so hard to come up with your own problems that every student should have to purchase such expensive books?) from within that were not available elsewhere. This happened many times. Those were some very expensive points.

In addition, something about this just screams monopoly to me. Where is the investigation?

Noone is being forced to buy the textbooks because noone is being forced to take the class in the first place.

So it is simply a question of whether the book is really needed or not- which is a case-by-case call. The students themselves aren’t in a position to judge this since 1) they haven’t yet taken the course and 2) haven’t yet read the book. Additionally, a college education is not like other purchases since students have an obligation to put in effort and make the most of the experience in ways that other types of consumers do not. The “I don’t want to buy/read the textbook approach” is simply immature.

The Professors are the only ones who can be responsible for text selection upfront, and student should extend a little faith to their teachers- not because they are perfect (they aren’t), but because you are already entrusting them with many things much more important than the money spent on a textbook.

What I like about this system is that it makes Professors’ clearly accountable for an important decision they already must make on behalf of students.

If the book really isn’t needed, then get rid of it altogether or label it as entirely optional. If it is truly needed then go ahead and make everyone buy it.

There should be feedback from students at the end of the semester, that’s a good time to call Professors out on improper text selection.

Of course this isn’t just about requiring purchase of a book. It’s about requiring that the book be purchased in electronic form (which doesn’t serve all students equally well) and requiring that it be a NEW copy of the book.

Mr. Larson.. First of all as a current college student attending a college that has started this ebook use program I need to give you the heads up that it is manditory here at Calhoun if you sign up for the course and it has ebook your financial aid is automatically deducted the cost of the ebook. Your not given the choice to buy. The ebooks currently are as high as the new books and the ownership expires after a time so you loose the right to the mnaterial while it is still part of your student loan to pay back.

I was surprised to see e-book adoption among college students referred to as “almost puzzlingly low.” E-books are not an effective tool for studying most subjects. In large chemistry textbooks, diagrams may span multiple pages. Long math examples and derivations span multiple pages. It is easy to refer to a physically dog-eared vocabulary page in a foreign language text. There are few subjects where it would be easier to type a note in an e-book than it would be to jot a note down in a margin. I can see how useful and portable they could be for reading stories in a literature class, but not much else.

Forcing students to purchase e-books is a terrible idea. If an e-book is not the right tool for a student, he or she should be able to pay for only the medium he or she prefers. Mandating e-book purchase financially penalizes students that learn differently.

I agree with Novack’s criticism of the guest author: Making an e-book discount contingent upon 100% adoption of that e-book by enrolled students incentivizes instructors to pre-order e-book licenses for all students in a course irrespective of whether it would be cheaper for students to purchase their own copies of used textbooks, style guides, and novels recently required for the course. A better revenue idea for the textbook companies is to double or triple the prices of titles adopted for courses within majors having lower job placement rates for graduates. This would immediately incentivize poorer students to choose a more economically beneficial major while raising the price ceiling on those who are willing to pay it. Again, the key is to punish with higher prices those students who willfully choose majors proven to have a poor occupational return on investment of time and tuition. Irrespective of whether those who insist on a given low-ROI major apparently are more future-blind of consequences than others and/or do not care, the relatively inelastic preferences of these diehards can prove to be quite the revenue source.

It’s always amusing to see textbook publishers cite statistics about the percent of money they are allegedly saving students, because they are the ones that are setting the baseline price. Used car salesmen do the same thing, but they at least provide free hot dogs and sodas for the kids.

As a professor, I’m saddened to see how rapidly textbook prices have risen despite alternatives such as open textbooks. Prices could not increase if professors cared enough to simply say no to the new editions and price hikes. We assign the $150 textbook because it’s the easy thing to do.

Perhaps what has emerged is something akin to the military-industrial-complex, an all-too-cozy relationship between publishers, administrators, and professors.

One other thing- research is not what is driving the costs. If leading physicists need to do research to produce a textbook for a college freshman, we are all in a lot of trouble.

Online textbooks suffer from a number of problems, some current and some future. Most of the current problems have already been addressed. One that hasn’t is that textbooks in any form are unnecessary these days.

The future problem with textbooks is that they are not interactive. Future online learning resources will be highly interactive, beyond what most people call “interactive” today. The textbook concept will reform into online reference materials.

After all, what’s in a textbook? It’s a series of reference materials, text and images, with problem sets. Choosing the right materials and their correct order is the hard part. All of these materials are now available for the cost of Internet access.

The future of education is going to be different than what we’ve seen in the past. Efforts to keep the textbook alive will fail because they cost too much and because they aren’t interactive learning resources. Someone will introduce the game-changing learning resource soon. It may take some ideas from my own effort, which just focuses on online science labs using real experiments and authentically interactive data collection (prerecorded real experiments). Colleges are using these labs today. Every part of the first year or two in college can be dealt with using new technology. Textbooks are very old technology and cloaking them in new media does not change their basic nature.

That’s a very interesting point. I think the text book publishers—-just like those of us who are journalists—need to accept the fact that the Web is changing the very nature of what we do. The question then becomes whether we can adapt (and make a living) in this new environment.